What is a professional employer organization (PEO)?

If you are not familiar with the term “PEO,” the first question that usually comes to mind is, “What is a PEO?” A PEO company, or professional employer organization, is defined as a business entity that provides human resources outsourcing services to client companies through the use of a co-employment relationship. The HROi PEO relationship involves a contractual allocation and sharing of employer responsibilities between HROi and the client. This shared employment relationship is often referred to as “co-employment.”

What is co-employment?

Co-employment is a relationship wherein the PEO company acts as the administrative employer and the client acts as the worksite employer. This relationship is based on a true partnership. Because of the co-employment relationship, a PEO company can help small- and medium-sized businesses achieve economies of scale that they may not be able to achieve on their own. Partnering with a comprehensive PEO company can help your business succeed.

In a co-employment relationship, what are the roles of each employer?

The following scenarios describe the roles of each employer in a PEO relationship:

The PEO becomes responsible for the payment of wages in the co-employment relationship, as well as the management of workers’ compensation claims and various other administrative functions related to the assigned employees.

The PEO provides the client and/or its worksite employees with workers’compensation insurance and handles all unemployment claims and administration.

The PEO provides and administers a comprehensive benefits package including a 401(k) plan, health insurance, a Section 125 plan, voluntary insurance products, and a broad range of other employee benefits programs.

The client remains responsible for directing and controlling the daily activities of the employees assigned to its worksite.

The client remains responsible for ensuring a safe work environment.

The client remains responsible for keeping track of actual hours worked and reporting those hours to the PEO for processing.

The client is responsible for making sure payroll funds are paid to the PEO.

Can my business benefit from partnering with a PEO company?

When you partner with HROi, your business can benefit in a number of ways. You become better positioned to:

Focus on your core business—by removing non-revenue-producing tasks, you can spend much more time on what counts: managing and growing your business.

Lower expenses and increase profits—by outsourcing your human resources,benefits, and payroll administrative tasks to HROi, you can take advantage of our economies of scale and broad expertise.

Become an employer of choice—by providing world-class employee benefits programs for employees, you are better able to attract and retain great employees.